CT life and health
For variable products, underlying assets must be kept in
a separate account
Insurance policies are not drawn up through negotiations and an insured has little to say about its provisions what contract does this describe?
adhesion (accept or reject) (adhere)
Whose responsibility is it to determine that all the questions on an insurance application are answered?
agent
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
aleatory (unequal amount promise are exchanged between payments and benefits)
the minimum interest rate on an equity indexed annuity is often based on
an index like S&P 500
The LEAST expensive first year premium is found in which of the following policies
annually renewable term
which of the following products provides income for a specified number of years for life and protects a person against outliving their money
annuity
what is the term used for an applicants written request to an insurer for the company to issue a contract based on the information provided
application
which of the following best describes fixed period settlement option
both the principal and interest will be liquidated over a selected period of time
which of the following components must a life insurance policy have to allow policy loans
cash value
REPRESENTATIONS are written or oral statements made by the applicant that are
considered true to the best of applicants knowledge
which of the following reports will provide the underwriter with the information about an insurance applicants credit
consumer report
Contracts that are prepared by one party and submitted to the other party on a take it or leave it basis are classified as
contracts of adhesion
what happens when a policy is surrendered for its cash value
coverage ends and policy cannot be reinstated
what characteristic makes whole life permanent protection
coverage until death death or age 100
An individual applied for an insurance policy and paid the initial premium. the insurer issued a conditional receipt. 5 days later applicant had to submit a medical exam. if the policy is issued, what would be the policy's effective date
date of medical exam
the term fixed in a fixed annuity refers to all of the following EXCEPT
death benefit
which of the following is true of a children's rider added to an insured's permanent life insurance policy
it is term coverage that is convertible to permanent insurance at or prior to the child reaching the max covered age
which of the following is true regarding the annuity period
it may last for the lifetime of the annuitant
which of the following is NOT true regarding the accumulation period of an annuity
it would not occur in a deferred annuity
which of the following is an example of a limited pay life policy
life paid up at age 65
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
limited pay whole life
in the event a policy lapses due to nonpayment of premium, within how many days of the policy be automatically reinstated once the outstanding premium is paid
45 days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
what document describes an insureds medical history, including diagnoses and treatments
Attending physicians statement (APS)
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
equal to the original policy for as long as the cash values will purchase
2 components of a universal life policy
insurance component and cash account
in the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms to which party
insurer to insured
During partial withdrawal from a universal life policy, which portion will be taxed?
interest
the policy owner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse but that principle will be paid to their children when they reach a certian age. Which settlement option will the choose
interest only option
Why is an equity indexed annuity considered to be a fixed annuity?
it has a guaranteed minimum interest rate
the premium of a survivorship life policy compared with that of a joint life policy would be
lower
an insured purchased a life policy in 2010 and died in 2020. the insurance company discovers a that time that the insured had misstated information about her insurance history on the application what will the insurer do?
pay the death benefit
which of the following policies would be classified as a traditional level premium contract
straight life
Second-to-die policy
survivorship life
which of the following, when attached to a permanent life insurnce policy, allows the policyholder to customize the policy to provide an additional amount of temporary insurance on the insured or allows amounts of temporary insurance to cover other family members
term rider
all of the following statements about equity index annuities are correct EXCEPT
the annuitant recieves a fixed amount of return
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?
the beneficiary will only receive payments of the interest earned on the death benefit
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
the customers associates, friends and neighbors provide the reports data
which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information
the fair credit reporting act
all of the following are true regarding a decreasing term policy except
the payable premium amount steadily declines throughout the duration of the contract
a viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy forwhat
% of face amount
How many hours of Connecticut continuing education must a nonresident producer complete every 2 years?
0 (since nonresident, residents should be 24)
for how long may the probationary waiting period for an accident related injury exclude coverage under an individual health policy
0 days
4 essential elements of a legal contract
1. Acceptance 2. Consideration 3. Competent parties 4. Legal purpose
the health reinsurance assosiaction may issue special health care plans to small employers with ___ or fewer employees, the majority of whom are low income eligible employees
10
An IRA owner who is 57 years old wants to make a withdrawal from her traditional IRA. What penalty will be imposed?
10%
what percentage of a company's employees must take part in a noncontributory group life plan
100%
how many days after the receipt of the proceeds may the owner rescind the life settlement contract
15 days
when appointing a producer, an insured must file a notice of appointment to the department of insurance within
15 days
which of the following statements is TRUE concerning the accidental death rider
2 or 3x face amount
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
2 years
how long is the incontestability period for misstatements on a health policy provision
2 years
continuing education credits must be completed every
2 years (24 hours)
what is a penalty tax for nonqualified distributions from a health savings account
20
how many consecutive months of coverage must ltc insurance provide in this state
24
What is the maximum penalty for habitual willful noncompliance w the fair credit reporting act.
2500
An insured recently discovered that the interest rate on his policy loan once again increased. Legally speaking, which of the following is the shortest amount of time that could have passed since the last change in the insured's interest rate
3 months
A producer is charged with a violation of the Insurance Code in another jurisdiction. The producer must now notify the Commissioner of the charges within
30 days
a liscensed life insurance producer must notify the commissioner of beginning to act in the life settlement broker's capacity within how many days
30 days
when the commissioner requires that advertising material be submitted for approval the advertisements must be submitted for review at least how many days prior to use
30 days
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
3000
how many days after coverge under a group plan ends may an insured convert to an individual policy without evidence of insurability
31 days
when an employee terminates coverage under a group insurance policy, coverage continues in force
31 days
how long must inusurers keep records of all printed published or prepared advertisements
4 years
Joe, age 63, was disabled and can no longer work. He meets the social security definition of total disability. How many work credits must Joe have
40
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
45 days
n order to quality for conversion from a group life policy to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?
50/50 (first number represents what INSURER pays) (the less the insurer must pay for coinsurance payments, the lower the premiums)
the minimum number of credits required for partially insured status is
6
a medicare supplement policy is to be replaced. the replacing policy may not impose probationary or elimination periods if the replaced policy has been in force for how long
6 months
for how long is an insurance company allowed to defer policy loan requests
6 months
how long is an open enrollment period for medicare supplement policies
6 months
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
60
In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits?
60
An insured pays the premium on a health insurance policy every week. What is the grace period for this mode of payment?
7
In order to sell long-term care partnership approved insurance policies, in addition to obtaining a life and health producer license, an agent must complete how many hours of additional training in long-term care coverage?
7
which of the following is the required number of participants in a contributory group plan
75%
in CT what it the maximum interest rate that may be charged by an inusrance company on a policy loan
8%
PPACA metal class classification
90% of excpected health care costs - platinum 80% gold 70% silver 60% bronze
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employee are tax free.
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees.
all of the following are dividend options EXCEPT
Fixed- period installment - it's a settlement option not dividend option
What phase begins after a new policy is delivered?
Free-look period
Which of the following is INCORRECT concerning taxation of disability income benefits?
If paid by the individual, the premiums are tax deductible.
What is an important feature of a dental expense insurance plan that is not typically found in a medical expense insurance plan?
Inclusion of diagnostic and preventative care
All of the following are differences between individual and group health insurance EXCEPT
Individual insurance does not require medical examinations, while group insurance does require medical examinations.
The Medical Information Bureau (MIB) was created to protect
Insurance companies from adverse selection by high risk persons.
Which of the following entities can legally bind coverage?
Insurer
MIB made of up who?
Insurers
What is the main purpose of the Seven-pay Test?
It determines if the insurance policy is a MEC.il
What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy?
It determines who receives policy benefits if the primary beneficiary is deceased.
Which of the following statements is not correct concerning the COBRA ACT of 1985?
It requires all employees, regardless of the number or age of employees to provide extended group health coverage
What dividend option can increase the death benefit of the existing life policy?
Paid-up additions.
Consideration
Part of the insured that is the payment of premiums and the health representations made in the application
Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?
Parts A and B medicare
All of the following are the duties of the replacing producer where replacement is involved EXCEPT
Send a letter to the policyowner of the right to receive information regarding the existing policy
Which of the following determines the length of time that benefits will be received under the Fixed Amount settlement option?
Size of each installment
Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy?
Submit the description in their own words on a plain sheet of paper
Which of the following statements about a typical suicide clause in a life insurance policy is true'?
Suicide is excluded for a specific period of years and covered thereafter
Which of the following policies would NOT offer a policy loan option?
Term life.
Which of the following may NOT be included in an insurance company's advertisement?
That its policies covered by a state Guaranty Association
Which of the following is not a cover under plan A in medigap insurance.?
The Medicare part A deductible.
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
Once the initial benefit limit in Medicare Part D is reached, how is the beneficiary affected?
The beneficiary is then responsible for a portion of prescription drug costs
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value
all of the following entities regulate variable life policies EXCEPT
The guaranaty Association
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?
The insured is in an accident and incurs a large claim
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years but at a higher premium rate
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?
The old policy should stay in force until the new policy is issued
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only; key person coverage may be funded by ANY type of life insurance.
All of the following are general requirements of a qualified plan EXCEPT.
The plan must provide an offset for social security benefits.
If an insurer issued a policy based on the application that had unanswered questions, what would be true?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true?
There is nothing wrong with this form of policy delivery
Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?
attending physician
which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium
automatic premium loan
Another aspect of group underwriting that differs from individual insurance is that the cost of the coverage is based on the
average age of the group and ratio of men to women.
an attempt by the existing insurer to dissuade a current policyowner from the replacement of existing life inusrance is known as
conservation
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower echelon employees. this plan would be funded with before tax corporate dollars, and it does not meet government approval standards. This annuity plan is
nonqualified annuity plan
Death benefits payable to a beneficiary under a life insurance policy are generally
not subject to tax
Death benefits payable to a beneficiary under a life insurance policy are generally ____.
not subject to tax
which of the following documents must be provided to the policyowner or applicant during policy replacement
notice regarding replacement
in long term care inusrance, what type of care is provided with intermediate care
occasional nursing or rehabilitative care
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
one year term option
the dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
one year term option
when pay hiv related tests be provided to the mib
only if the individual is not identified
when may a supplemental illustration be used
only when it is preceded by a basic illustration
changing irrevocable beneficiary
only with consent of the beneficiary
Which Universal Life option has a gradually increasing cash value and a level death benefit?
option a
in a life settlement contract whom does the life settlement broker represent
owner
which of the following explains the policyowners right to change beneficiaries, choose options, and receive proceeds of a policy
owners rights
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
pay a reduced death benefit
a participating insurance policy may do which of the following
pay dividends to policyholder
an insured pays her major medical insurance premium annually on march 1. last march she forgot to mail her premium to the company. on march 19, she had an accident and broke her leg. the insurance company would
pay the claim (accident during grace period)
which of the following allows the insurer to relieive a minor insured from premium payments if the minors parents have died or become disabled
payor benefit
which of the following riders would NOT cause the death benefit to increase
payor benefit rider
A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making premium payments due to death or disability/ Which policy rider
payor beneift
Which of the following determines the cash value of a variable life policy?
performance of the portfolio
which of the following statements is true regarding an agent's report during the policy
personal observations
a policy with a 31 day grace period means
policy will not lapse for 31 days if the premium is not paid when due
which of the following would be included in a policy summary
premium amounts and surrender values
all of the following are true about variable products EXCEPT cash value is not guaranteed policyowners bear investment risk premiums are invested in insureds investment account minimum death benefit is guaranteed
premiums are invested in insureds investment account
medicare supplement policies must define a pre existing condition as any condition for which the insured sought medical attention within what time frame
previous 6 months
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
principal sum
whose responsibility is it to exercise due diligence in determining if a policy is suitable for an applicant
producer
when an insured combines 2 periods of disability into one the insured must have suffered from
recurrent disability
What method do insurers use to protect themselves against catastrophic losses?
reinsurance
allows the insurance company to limit the insureds benefits of his average income over the last 24 months.
relation of earnings to insruace
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?
representative of most people
which of the following is TRUE about nonforfeiture values?
required by state law to be included in the policy
which of the following is not true of life settlements
seller must be terminally ill
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicants premium check, answers any questions an applicant may have and then leaves, what did he forget to do?
sign for good health
An IRA purchased by a small employer to cover employees is known as a
simplified employee pension plan
What type of whole life insurance policy generates immediate cash value?
single premium
regarding long term care policies, which of the following would NOT be included in activities of daily living
sleeping (cant get help to sleep)
a temporary liscense may be issued without examination to all of the following except
spouse of a retired producer
workers compensation benefits are regulated by which entity
state government
All of the following would be classified as "limited insurance coverage" except?
supplemental social security coverage
which of the following cannot issue long term care coverage contracts?
surplus lines insurance companies
The interest earned on dividends is
taxable
Children's riders attached to whole life policies are usually issued as what type of insurance?
term
Nonforteiture Values guarantee which of the following for the policyowner
that the cash value will not be lost
which of the following is true about the requirements regarding HIV exams
the applicant must give prior informed written consent
Who chooses a primary care physician in a HMO plan?
the individual
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
the insured
a father owns a life insurance policy on his 15 year old daughter. the policy contains the optional payor benefit rider. if the father becomes disabled, what will happen to the life insurance premiums
the insured's premiums will be waived until she is 21
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
the insurer will pay the full death benefit from the group policy to the beneficiary
An applicant received a long-term care policy on May 1st. After carefully reviewing the policy, he decided that it was not what he needed. He returned the policy to the insurer on May 27th. Which of the following it true?
the insurer will refund all of the paid premiums without penalties
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
the interest is not taxable since it remains inside the company
An insurer is on the verge of bankruptcy and can no longer pay the claims to its insureds. Which of the following entities will make sure that the insureds receive their money?
the inusrance guarnaty assosicaiton
which of the following statements is true regarding coinsurance
the larger the percentage that is paid by the insured, the lower the required premium will be (typically 80/20)
insuring clause of a disability policy usually states all the following except
the method of permium payment
which of the following will vary the length of the grace period in health insurance policies
the mode of the premium payment ( 7 weekly, 10 monthly, 31 on other)
in a life settlement contract, whom does the life settlement broker represent
the owner
the policy owner of a universal life policy may skip paying the premium and the policy will not lapse as long as
the policy contains sufficient cash value to cover the cost of insurance
all of the following are reasons a small employer would not have the option to renew its health plan except
the policy doesnt provide the coverage the employer wants
all of the following statements concerning the use of life insurance as an executive bonus are correct EXCEPT
the policy is owned by the company
If an insured continually uses the automatic premium loan option to pay the policy premium,
the policy will terminate when the cash value is reduced to nothing
if a disabled child is reaching the limiting age for coverage but is mainly dependent upon the policyholder for support and maintenance, what actions must be taken to continue coverage
the policyholder must furnish proof of incapacity to the insurer within 31 days of the child reaching the limiting age
which of the following may assign ownership of a life insurance policy to another party
the policyowner
which of the following is correct regarding a whole life policy
the policyowner is entitled to policy loans
What is required of a nonresident producer who moves to Connecticut from another state?
the producer must report a change of address to the Dept of Insurance within 30 days
if an applicant submits the initial premium with an application, which action constitutes acceptance.
the underwriters approve the application
which of the following is true regarding taxation of accelerated benefits under a life insurance policy
they are tax free to terminally ill insured
what is the main purpose of the regulation on life inusurance policy illustrations
to help customers make educated decisions in buying life inusurance
what is the purpose of the agent's report in the application process
to provide additional info to underwritier s
a key person insurance policy can pay for which of the following
training a replacement cost
Social Security benefits include all of the following, EXCEPTUnemployment benefitsDisability benefitsRetirement benefitsMedicare benefits
unepmployment
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
unfair trade practice
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
universal life
Which of the following types of policies allows for a flexible premium and a variable investment component?
variable universal life insurance
which of the following is a key distinction between variable whole life and variable universal life
variable whole life guarantees death benefit
all of the following benefits are available under social security except
welfare benefits (Death benefits, old age and retirement, disability are covered)
a completed notice to applicant regarding replacement of life insurance signed and dated by the applicant must be given to the applicant
when the application is accepted
An applicant for an individual health policy failed to complete the application properly. before being able to complete the application and pay the initial premium, she is confined to a hospital. this will not be covered by insurance because she has not met the conditions specified in the
consideration clause
which of the following provisions would NOT be found in an individual long term care policy
continuation of coverage
Which of the following is a requirment for the advertising of medicare supplement insurance benefits
copies of the ads must be reviewed by the commissioner before use
according to the entire contract provision a policy must contain
copy of the original application for insurance
a health inusrance policy that pays a lump sum if the insured suffers a heart attack or stroke
critical illness
if an insured withdraws a portion of the face amount in the form of accelerated benefits cause of terminal illness, how will that affect the payable death benefit from the policy?
death benefit will be smaller
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
decrease
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
decreasing
which of the following is NOT a term for the period during which the annuitant or the beneficiary receivies income
depreciation period
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
disability buy sell
A waiver of premium provision may be included with what type of health insurance policies?
disability income
in group life policies a certificate of insurance is given to
each insured person
An adjustable life policy can assume the form of
either term insurance or permanent insurance.
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he is not eligible for benefits for at least 30 days. This would indicate that his policy was probably written with a 30 day
elimination period
the HMO act of 1973 required employers to offer HMO plan as an alternative to regular health plans if the company had more than 25 employees. how has this plan changed since
employers are no longer forced to offer HMO
Long-term care coverage may be available as any of the following options EXCEPT
endorsed to health policy
the provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract
entire contract clause
which of the following best describes the aleatory nature of an insurance contract
exchange of unequal values
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?
executive is the owner, and executive pays the premium
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
fixed amount
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
fixed period (period certian)
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
for 20 years or until death, whichever occurs first
Where can notice of the right-to-return policy be found in the Medicare supplement policy?
front page of policy
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
full benefits
if an insured worker has earned 40 quarters of coverage the workers status
fully
which is TRUE about the cash surrender nonforfeiture option
funds exceeding the premium paid are taxable as ordinary income
An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. What policy provision allowed for this?
grace period
the automatic premium loan provision is activated at the end of the
grace period
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
guaranteed insurability rider
all of the following are requirments for a limited benefit disclosure format EXCEPT
highlighted text
in which of the following cases will the insured be able to receive the full face amount from a whole term policy
if the insured lives to age 100
under what circumstance may a creditor of an insured, not named as beneficiary, seek entitlement to the proceeds of a life inusrance death benefit
if the policy was purchased with the intent to defraud the creditor
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
immediate annuity
a health insurance policy lapses but it reinstated within an acceptable timeframe. how soon from the reinstatement date will coverage for accidents become effective
immediately (coverage for sickness may have waiting period of 10 days )
which of the following riders would not increase the premium
impairment
annually renewable term policies provide a level death benefit for a premium that
increases annually
which of the following is an acceptable term to use when referring to a life insurance policy in an advertisement
indemnity
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner does not amend the beneficiary designation, what will happen to the policy's death benefit?
insured's estate
All of the following must sign an application for health insurance exceptproducerinsurerproposed insuredapplicant
insurer
Which of the following entities has the authority to make changes to an insurance policy?
insurer's executive officer.
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?
interest only
all of the following are non forfeiture options EXCEPT
interest only (settlement option)
a guaranteed renewable disability insurance policy
is renewable at the insureds option to a specific age
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
it is reduced to the amoint of what the cash value would buy as a single premium
The probationary period in a group health policy is intended for people who:
join the group after the policy effective date.
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
joint life
Which two terms are associated directly with the premium?
level or flexible
which of the following settlement options in life insurance is known as straight life
life income
If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used by the insurer?
lump sum
which of the following statements is TRUE concerning whole life inusurance
lump sum death benefits are not taxable
A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventative care. What best describes the health system that the woman is using?
managed care
Health policies intended to complement existing federally-funded health policies are known collectively as
medicare supplement policies
All of the following are excluded from coverage in an individual health insurance policy EXCEPT
mental illness
under the affordable care act, which classification applies to health plans based on the amount of covered costs
metal level classification
Under an individual disability policy, the minimum schedule of time in which claim payments must be made to an insured is
monthly
in a long term care policy, pre exisiting conditions limitations
must appear as a separate paragraph and clearly labeled
which statements is NOT true regarding a policy summary
must be combined with a sales illustration
how much of the part A deductible does the medigap policy plan A cover
none
Which of the following is a feature of a disability buyout plan?
A lump-sum benefit payment option.
Who is a third-party owner?
A policyowner who is not the insured
The term "illustration" in a life insurance policy refers to
A presentation of non-guaranteed elements of a policy.
All of the following are correct about the required provisions of health insurance policy EXCEPT
A reinstated policy provides immediate coverage for an illness
All of the following are correct about the required provisions of a health insurance policy EXCEPT
A reinstated policy provides immediate coverage for an illness. (sickness is after 10 days)
Material Misrepresentation
A statement that, if discovered, would alter the underwriting decision of the insurance company.
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?
Adjust the claim benefit to reflect the insured's true age
Which of the following statements is NOT true, regarding health insurance policy provisions?
All additional provisions written by insurers are cataloged by their respective states.
under a key Person disability income policy, premium payments
Are made by the business and are not tax-deductible.
An agent selling variable annuities must be registered with
FINRA
An insurance contract must contain all of the following things EXCEPT
Beneficiaries consent
n applicant misstates his age on his app for a health insurance policy. He states that that he is 39, but is actually 49. When he files a cliam, what most likely will happen?
Benefits paid will be those that would have been purchased at the correct age
n addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health?
By requiring that the insurance be incidental to the group.
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT
Death benefits are paid only if death occurs within 24 hours of an accident
Social Security disability definition includes all of the following EXCEPT.
Disability expected to last for at least 6 months.
Which of the following statements about occupational vs. nonoccupational coverage is TRUE
Disability insurance can be written as occupational vs. non
Concerning group Medical & Dental insurance, which of the following statements is incorrect?
Employee benefits are tax deductible the year in which they were received
which statement is NOT true regarding a straight life policy
Its premium steadily decreases over time in response to its growing cash value
which of the following is TRUE regarding the premium in term policies
LEVEL premium they are all level, only the death benefit amount may change
Variable whole Life insurance is based on what type of premium
Level fixed
a policy will pay the death benefit if the insured dies during the 20 year premium paying period and nothing if the death occurs after the 20 year period
Level term
An applicant who receives a preferred risk classification qualifies for:
Lower premiums than a person who receives a standard risk (best case risk class!)
All of the following statements concerning Medicaid are correct EXCEPT
Medicaid is a state funded program that provides health care to persons over age 65, only.
Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
Monthly
An applicant for a health insurance policy returns a completed application to her agent along with the check for her first premium. she receives a conditional receipt 2 weeks later which of the following has the insurer done by this point?
Neither approved the application or issued the policy
MIB
Nonprofit organization that maintains underwriting information on applicants for life and health insurance
Answer and Explanation: All of the following would be considered an insurance transaction EXCEPT:
Obtaining an insurance license.
what is another name for social security benefits
Old-Age, Survivors, and Disability Insurance
Which of the following best describes a presumptive disability?
One that is severe enough that the insured automatically qualities for full disability benefits
When does Medicare cover nursing home care?
Only if it is part of treatment for a covered illness or injury
who might receive dividends from a mutual insurer
Policyholders
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used by the insurer as a single premium to purchase a completely paid up permanent policy that has a reduced face amount from that of the former policy.
Purchase a single premium policy for a reduced face amount.
Which of the following terms relates to disability income insurance?
Residual amount benefits.
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration
what should a producer do before taking an application for a Medicare supplement policy
See if the issuance of the policy will give the applicant more than one medicare policy
what is the purpose of cobra
To allow continuation of health insurance coverage for terminated employees
What is the purpose of the Buyers guide
To allow the consumer to compare the costs of different policies
what is the purpose of coinsurance provisions
To help the insurance company to prevent over utilization of the policy
what is the purpose of key person insurance
To minimize the risk of financial loss caused by the death of a key employee
the paid up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life Option A (Level Death Benefit option) policy
which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit
Universal life - option A
which of the following is a statement that is guaranteed to be true and if untrue may breach insurance contract
Warranty
in which of the following situations has replacement occurred
a policyowner borrows 25% of their cash value to buy a new policy
An individual is approaching retirement age and is concerned about having proper coverage should he have to be placed in a LTC facility. His agent told him that LtC policies would provide necessary coverage at all following levels except
acute
group health insurance is characterized by all of the following EXCEPT
adverse selection
in which medicare supplemental policies are the core benefits found
all plans
which of the following indivuduals is elegible for a health savings account
allison is insured by a high deductable health plan
upon a request for accelerated benefits, the policyowner must be given
an illustration showing the effect of the payment on the policy
While a claim is pending, an insurance company may require
an independent examination as often as reasonably required
Who can make a fully deductible contribution to a traditional IRA?
an individual not covered by an employer sponsored plan who has earned income
which of the following must be provided to all applicants for medicare supplement insurance
an outline of coverage
how often must life settlement brokers renew their license
annually
whose life expectancy is taken into consideration, and for whom the annuity is written.
annuitant
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
any form of life insurance
which statement accurately describes the change of beneficiary provision
any policy that has a death benefit must also have a change of beneficiary provision
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?
applicant
An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation?
applicant
In a replacement situation, all of the following must be considered EXCEPT?
assets
the premium charged for ecersizing the guaranteed insurability rider is based upon the inusreds
attained age
The corridor deductible is used during the period between
basic and major medical expense
to be eligible for tax credits under the ACA, individuals must have income that is what percent of the federal poverty level
between 100-400%
all of the following are personal uses of life insurance EXCEPT
buy-sell agreement (business use)
When a policyowner assigns interest in a whole life insurance policy, the new owner may do all of the following EXCEPT
change the insured
Which of the following describes the relationship between a capital sum and a principal sum?
capital sums are percentages of principal sums.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
cash option
In a variable life insurance policy, all of the following assets are held in the insurance company's general account EXCEPT.
cash surrender values.
Which of the following components must a life insurance policy have to allow policy loans?
cash value
ABC insurance company wishes to begin transacting business in PA. Before it can do so, it must do what?
certificate of authority
Who does HUSKY plan serve?
children
which of the following dates must be contained in policy summary
date the summary was prepared
which 2 terms are associated with the way an annuity is funded
single payment or periodic payments
which type of life insurance policy generates immediate cash value
single premium
in a survivorship life policy, when does the insurer pay the death benefit
upon the last death
within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained
3 days
What does "level" refer to in level term insurance?
face amount
Which policy component decreases in decreasing term insurance?
face amount
The death benefit under the Universal Life Option B
gradually increases each year by the amount that the cash value increases
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called
guaranteed insurability
Fixed annuities provide all of the following EXCEPT
hedge against inflation
Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information
held or transmitted in any form
a return of premium term life policy is written as what type of term coverage
increasing
What type of insurance would be used for a Return of Premium rider?
increasing term
the provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss
legal action
which of the following best describes annually renewable term insurance
level term insurance
a rider attached to a life insurance policy that provides coverage on the insured's family is called the
other insured rider
a couple owns a life insurance policy with a children's term rider their daughter is reaching the max age of dependent coverage so she will have to convert to permanent insurance in the near future which of the following will she need to provide for proof of insurability
proof of insurability is not required
Which nonforfeiture option provides coverage for the longest period of time?
reduced paid up (coverage until 100)
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?
reinstatement provision
a guaranteed renewable disability insurance policy
renewable at the insureds option to a specific age
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?
revocable
the insured has his wife named as the beneficiary of his life insurance policy. to ensure that his wife had income for life after the insured's death, he chose the life income settlement option. the amounts of payments will be determined by all EXCEPT
the insured's age at death
which of the following best defines target premium in a universal life policy
the recommended amount to keep the policy in force throughout its lifetime
Irrevocable Beneficiary
they can be changed only with the written consent of the beneficiary
which of the following is NOT true regarding equity indexed annuities
they earn lower interest rates than fixed annuities
in insurance policies, the insured is not legally bound to any particular action in the insurance contract but the insurer is legally obligated to pay losses covered by the policy. what contract element does this describe?
unilateral
Which type of life insurance policy allows the policy owner to pay more or less than the planned premium
universal life
which of the following products requires a securities license
variable annuity
